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The Expert Witness: When Expectations Collide
CASE Mar 24, 2015 Richard Fein, PhD, FCAS, MAAA RIF Consulting, LLC
Introduction
Context of Professionalism Required by CAS Standards and Code It’s what defines Actuaries as a profession Professionalism and Ethics are in the air Professionalism and Ethics are in the news!▪ Questioned in the media▪ Highlighted in the professional journals▪ Identified in both as concerning
News -▪ Vaccines – bad science▪ Climate change – opaque science/manipulated in some
cases▪ Capital Markets Risk Mgt - bad (fill in your own blanks)
3/24/2015 Richard Fein RIF Consulting, LLC
The Actuary’s Context-Litigation
You are a professional – conferred by society Arena in which experts are commonly
employed You have obligations & expectations – from
where? Stakeholders have expectations which may
conflict with your own and your professionalism
Standards are not detailed for all situations Your statements are for the record
Are actually 6 types of statements3/24/2015 Richard Fein RIF Consulting, LLC
Six Statements
What you want to say What you mean What you actually say What is recorded What others heard What others say you meant
3/24/2015 Richard Fein RIF Consulting, LLC
What is a Profession
Good site: Bob Kizlik reference on my site Occupationally related; specific area of
need Decision making support Performance standards and CE’s High level of public trust Society grants the authority to practice Professional accepts personal
responsibility and accountability Legal requirements by venue
3/24/2015 Richard Fein RIF Consulting, LLC
What is an Expert Witness…
One who knows more and more about less and less
An expert is one who has made all of the mistakes that can be made in a narrow area - Bohr
An expert is a person who avoids small errors as he sweeps on to the grand fallacy.
An expert is someone who knows all of the answers if you ask the right questions
3/24/2015 Richard Fein RIF Consulting, LLC
What is an Expert Witness…
An expert can be found to testify to the truth of almost any factual theory no matter how frivolous
If the world should blow itself up, the last audible voice would be that of the expert saying that it can’t be done
It is quite apparent that experts are readily available to present essentially frivolous theories in an effort to defeat summary judgment or to create reasonable doubt
Usually I like my expert to be around 50 years old, have some gray in his hair, wear a tweedy jacket and smoke a pipe.” (presentation skills vs subject competence
3/24/2015 Richard Fein RIF Consulting, LLC
What is an Expert Witness…
An expert’s function is precisely this: to provide the judge and jury with a ready-made inference which the judge and jury, due to the technical nature of the facts, are unable to formulate
3/24/2015 Richard Fein RIF Consulting, LLC
Actuarial Expert Witness
Form of participation Expert report Fact witness Expert witness Review and conclude on someone else’s work
Provide advice Can be largely educational…likely more Created inherently by circumstances
Fact witness Statements or actions
3/24/2015 Richard Fein RIF Consulting, LLC
Who are the Stakeholders?
Principal for whom report is prepared Counsel; Opposing counsel ; your own counsel Judge & Jury Panel Public Profession Anyone to whom report could reasonably be
exposed, read and used Caution!
Yourself Whatever sources of moral and ethical standards
that apply personally should apply here
3/24/2015 Richard Fein RIF Consulting, LLC
Types of Expectations
Relevant to a material fact Testimony would assist the jury Witness must be qualified Testimony must be reliable and have a proper
basis for the opinion – ASOP’s & more… Probative value must not be substantially
outweighed by dangers of confusion ,undue consumption of time or unfair prejudice
NB: Expert testimony in most cases will be the difference between winning and losing
3/24/2015 Richard Fein RIF Consulting, LLC
Types of Expectations
An expert’s function is precisely this: to provide the judge and jury with a ready-made inference which the judge and jury, due to the technical nature of the facts, are unable to formulate.
3/24/2015 Richard Fein RIF Consulting, LLC
Expert’s View??
3/24/2015 Richard Fein RIF Consulting, LLC
Principal’s View??
3/24/2015 Richard Fein RIF Consulting, LLC
Counsel’s View??
3/24/2015 Richard Fein RIF Consulting, LLC
Grounds for Exclusion
Authoritative sources rejecting method Significant data which was ignored Similar situations in which specific
expert was excluded Affidavit of another expert
3/24/2015 Richard Fein RIF Consulting, LLC
Rules Governing Experts
Federal Rule 702 Daubert exclusions
State specific By agreement – case specific ASOP’s & Principles & Code of
Conduct
3/24/2015 Richard Fein RIF Consulting, LLC
Rule 702 Federal Rules of Evidence Testimony by Expert Witness
(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;
(b) the testimony is based on sufficient facts or data;
(c) the testimony is the product of reliable principles and methods; and
(d) the expert has reliably applied the principles and methods to the facts of the case.
3/24/2015 Richard Fein RIF Consulting, LLC
Daubert – Basis for Exclusion1993 Decision
(1) whether the expert's technique or theory can be or has been tested—that is, whether the expert's theory can be challenged in some objective sense, or whether it is instead simply a subjective, conclusory approach that cannot reasonably be assessed for reliability;
(2) whether the technique or theory has been subject to peer review and publication;
(3) the known or potential rate of error of the technique or theory when applied;
(4) the existence and maintenance of standards and controls; and
(5) whether the technique or theory has been generally accepted in the scientific community.
3/24/2015 Richard Fein RIF Consulting, LLC
Guiding Codes, ASOP’s Principles
Statements of Principles Ratemaking, Reserving Old, but embedded
ASOP’s – Know them Codes of Conduct Others
Courts State/Federal Rules & History
Personal Codes
3/24/2015 Richard Fein RIF Consulting, LLC
Forms
Expert Report Review another expert’s report Specific conclusions Disclose to what you will testify
Specific vs. general Deposition Trial examination Cross examination Documents
3/24/2015 Richard Fein RIF Consulting, LLC
When do Expectations Collide
Stakeholder expectations The way you communicate is essential
Logos, pathos, ethos (7 habits of persuasive speakers, John Coleman ref: Mark [email protected] Watson presentation; Aristotle’s Appeals)
Listening skills are even more important – especially when speaking for the record
Is this a game? Do you plan ahead?
3/24/2015 Richard Fein RIF Consulting, LLC
McClenehan’s Principles, Mostly…
Understand the subject matter Don’t get caught up in the zeal of the advocate who
employs you Disclose Who represents you??
Your role may be mainly educational – use simple and unambiguous language
Communication of technical concepts must be comprehensible to laymen Caution
You are not responsible for the outcome but can only offer a sound basis for making a determination Caution
Know your area of practice3/24/2015 Richard Fein RIF Consulting, LLC
McClenehan’s Principles, Mostly…
Know your standards of practice (principles, codes) - Important
Know your case and your role Challenges created by attorneys
Attempting to paraphrase Attempting to stretch or bend Attempting to summarize
Don’t guess May be required to answer hypotheticals
Don’t try to anticipate the strategy Don’t get “cute”
3/24/2015 Richard Fein RIF Consulting, LLC
Your Statements Are for the Record:
what you want to say what you mean what you actually say what is recorded what others heard what others say you meant
Caution As long as you use, FCAS - bounded
3/24/2015 Richard Fein RIF Consulting, LLC
Examples…
The actual results show the actuary who signed SAO didn’t do a professional analysis
Results exceeded estimate therefore ASOP’s were violated
The professional and business manager promoted goals of company – Advocate?
The point estimate turned out to be “way” too low – take advantage of uncertainty
The actuary didn’t use all of the available information
3/24/2015 Richard Fein RIF Consulting, LLC
Examples…
The actuary didn’t select appropriate methods
The actuary didn’t select reasonable assumptions
The actuary failed to live up to the Codes of Conduct
Content of report does not show why the actuary selected the assumptions only how applied
Put a triangle in front of an actuary – project answer – that’s what actuaries do…what?
3/24/2015 Richard Fein RIF Consulting, LLC
Examples…
The actuary failed to show a range The range is too small The data was not valid and the actuary
should have known Actuary should have known the intended
use of the work “I don’t use statistical indicators such as
goodness of fit. Wouldn’t know how to use…”
The parameters were calculated by (staff, software, others…)
3/24/2015 Richard Fein RIF Consulting, LLC
Examples…
“Yes, there is no applicable data, but that is my estimate of an assumption…( solely using my experience as an actuary”)
“Actuarial judgment permits me to make assumptions without relevant data”
“The actuary violated the Codes of Conduct and Standards of Practice”
“I was not required nor asked to provide a range”
3/24/2015 Richard Fein RIF Consulting, LLC
Expert Witness Matters
You are a professional In an arena in which experts are
commonly employed You have obligations Your statements are for the record: what
you want to say, what you mean, what you actually say, what is recorded, what others heard, what others say you meant
Stakeholders have expectations which may conflict with professionalism
3/24/2015 Richard Fein RIF Consulting, LLC
Final Comments/Questions
Statements made as FCAS are subject to legal challenges – that is the climate
Treat seriously, but do not overstate challenges
You may be most knowledgeable… … that’s not enough Take personal responsibility for work
product It’s a proud and highly regarded
profession3/24/2015 Richard Fein RIF Consulting, LLC
Q&A
3/24/2015 Richard Fein RIF Consulting, LLC